Venture funding lag costing Illinois jobs
June 27, 2005
BY MICHAEL KRAUSS
The Land of Lincoln
is losing the fight for funds. You and your children are going
to have a tougher time finding a job as a result.
4.4 percent of the nation's population. We generate 5 percent
of the country's GNP. Since January 2002 Illinois received only
1.5 percent of the venture capital invested nationally, according
to a new Private Equity Monitor compiled by the Illinois Venture
is the money that goes into entrepreneurial companies. Some companies
falter, but a few grow healthy and spawn jobs. Those jobs replace
traditional manufacturing jobs migrating to China. Too little
venture investment today means too few jobs tomorrow.
to the IVCA, the $969 million in venture capital that Illinois
companies received created 21,160 jobs. If Illinois received its
fair share of venture funding, equal to our proportion of the
population -- approximately $2.8 billion -- we would have created
isn't just money. Illinois isn't producing enough entrepreneurs.
can say there's too little money," says Keith Bank, the new
chairman of the IVCA. "We haven't done a great job developing
enough investment-worthy deals here in Chicago."
another problem is the absence of home runs: no local Microsoft,
eBay or Google to create hundreds of millionaires who become entrepreneurs.
On the plus
side, the IVCA documented the problem. "The key to solving
any problem is to measure that there is a problem," says
IVCA Executive Director Maura O'Hara. "I'm excited that we've
vice president of Leo Capital Holdings and co-chairman of the
IVCA research committee that compiled the numbers, says, "We
do have a deficiency in Illinois. Venture capital is having a
very positive effect in Illinois, it simply could be much larger."
2006 gains momentum
be the biggest BIO show ever," says Jack Lavin, Gov. Blagojevich's
point man on economic development and director of the Illinois
Department of Commerce and Economic Opportunity.
last week in Philadelphia promoting Illinois and scouting the
BIO 2005 trade show. Next April 9 to 12, the global leadership
of the biotech industry arrives in Chicago as the Windy City hosts
BIO 2006. Lavin expects more than 20,000 visitors; a record 18,000
attended in Philadelphia.
to give BIO 2006 a Midwestern flavor. In addition to traditional
pharmaceuticals, Lavin is spotlighting industries that prosper
in Illinois, such as makers of medical devices, agriculture and
environmental protection. He's bringing Midwestern states together
as a block to get VC's to stop flying over our region.
budgets, Gov. Blagojevich delivered $1 million in funding to seal
the deal to attract the mega show. The city of Chicago is providing
$250,000 in support. Lavin predicts a flurry of activity in coming
weeks to build interest in BIO 2006. Watch for the business community
to step up the pace as Abbott Laboratories CEO Miles White takes
the helm as co-chairman of the BIO 2006 mobilization effort.
Lavin is optimistic.
"If we do it right, we're going to have tremendous investments
in Illinois," he says. The bidding opens soon for the BIO
2010 conference. Lavin is going after that one, too.
wireless hot spots
Trips to traffic
court aren't all bad. Alex Durr of West Englewood paid his $75
fine. Leaving the Thompson Center plaza, he spied Motorola's seamless
many wireless hot spots are there in the city?" asked Chicago's
CIO Chris O'Brien from the podium. "Eighty nine," shouted
Durr from the crowd.
fact, 84 free hot spots abound in Chicago. They include the Daley
Center plaza, Millennium Park, the Chicago Cultural Center and
all the city's libraries.
was the closest. He won a Motorola RAZR phone and Bluetooth wireless
headset worth $600.
losing one of our top tech communicators. Kevin Kutz, head of
Burson Marsteller's Midwest tech practice joins Microsoft as communications
director leading the global rollout of Longhorn, the new Windows
Krauss is a Chicago area tech writer and consultant.